Ailing Nokia targets SEAsia comeback

Nokia is focusing its sights on redeveloping its brand in Asia, and other developing markets, as the ailing handset giant continues to maneuver its position in the market under the stewardship of new chief executive, Stephen Elop.

An expert at Aramea Asset Management in Hamburg, quoted in Business Standard India, described Nokia as having “really forgot(ten) Asia”:

“Due to their race with Apple, there was so much focus on the developed markets that this idea of producing and selling affordable handsets was really lost,” said Boris Boehm, who helps manage ¤1.2 billion ($1.7 billion), including Nokia shares at Aramea Asset Management in Hamburg. “They really forgot Asia.”

Nokia Connection 2011 in Singapore will see Elop make his first public appearance in Asia since taking the reigns. Business Insider reveals that he will “lay out the company’s strategy and show customers new models” at the event.

Despite the emphasis on refocusing, Nokia reminds us, on its blog, that the brand still maintains a strong reputation in the Asian continent:

Nokia has been voted the top brand in Bangladesh across all categories for the the 3rd year in a row, the leading digital brand in Thailand, and Reader’s Digest most trusted mobile phone brand in New Zealand, just to mention a few.

That said, the Finnish giant’s move to focus on development in Asia comes not a moment too soon as the smartphone market in the region goes from strength to strength. New research from Canalys suggests that the region will ship 106 million phones (including smartphones) this year, an increase of almost 20 percent on last year’s 90 million.

While the growth is tipped to continue as ZDNet Asia reports:

The research firm further estimated that the number will increase to 163 million by 2015 at a compound annual growth rate (CAGR) of 39 percent. This region encompasses Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The Canalys report looks at Nokia which is described as “remain(ing) well-positioned due to its wide distribution network, which is capable of driving significant volumes, and should not be underestimated.” Though the report does caution that “the handset maker will continue to face pressures as a result of the company’s ongoing strategy and platform transitions.”

From the ZDNet Asia article:

Chiam noted: “Once Nokia is through transitional period and has delivered a Windows Phone-based product portfolio across several price points, it will re-establish itself as a formidable force in the smartphone market. “Until then, other manufacturers will be looking to fill the gap,” he said.

The report also suggests that RIM will continue its success with BlackBerry by expanding across Southeast Asia – despite recent disappointing global figures – while HTC is also tipped to see market share growth, as are local brands like Spice which has made strategic acquisitions in key markets.

I’m not sure how Canalys can be so confident that Windows-based devices will “re-establish” Nokia as a “formidable force” when much of the industry still see its move over to Microsoft as somewhat of a gamble.

In Southeast Asia Nokia retains significant brand recognition but these devices are under pressure as affordable smartphones and high-end ‘dumb’ feature phones offer consumers significantly great functionality at a reasonable cost.

Certainly Android is leading the charge, with Apple providing the top technology and RIM’s BlackBerry devices popular in many countries for combining the two. It remains hard to see exactly where Nokia could fit in, using an operating system that has scarcely any presence in Asia – where recognisable brands and peer group choices are important factors when choosing a device.

In general, Apple is a surprising omission from media reports around the research.

Were the iPhone maker to announce an upgrade or next generation version of the device this year – or even its much-rumoured budget iPhone – then Canalys’ optimistic predictions for the lesser smartphone manufacturers could be tempered by increased Apple market share in the Southeast Asian region.

Certainly Canalys’ data on numbers is interesting, however the competitor landscape is tough to call… can Nokia really make a comeback in the region?

---

---

---